No Gas @ MindSay

So, what I've read about the Gas Tax Holiday proposal by McCain and Clinton pretty much says that very little savings would be passed on to the consumer. And, in fact, may actually benefit the gas companies! What the Heck? Apparently, Clinton and McCain are not listening to the elitist economists, with their math and learning, who almost unanimously agree that both plans are pointless and costly.

Here are some quotes:

"The advocates of a "gas tax holiday" are exaggerating the benefits to consumers from their proposal. If the Illinois experience is a guide, there is likely to be some reduction in the price of gas, but it would fall well short of the size of the tax reduction. In order to pay for the tax cut, the government would have to cut back on highway construction and maintenance or find some other way of plugging the shortfall in revenues to the Highway Trust Fund."

"There's another catch to the McCain and Clinton proposals. Currently, the gas tax is deposited directly into the Highway Trust Fund, which is used to pay for upgrades to roads and bridges. The American Society of Civil Engineers estimates that the three-month gas tax holiday could cost as much as $8.5 billion.

McCain has responded by pledging to fund the Highway Trust Fund out of general revenues. That, of course, means adding another $8.5 billion in federal debt, which in turn means adding as much as $383 million per year in interest payments."

"Clinton campaign spokesperson Geoff Garin said in a conference call this week that the proposal would save each driver $70. The Clinton campaign did not respond to our request to clarify how it arrived at that figure. But the non-partisan American Association of State Highway and Transportation Officials estimates that the total savings for the average American motorist works out to about $28; for a two-car household, that would be $54.

That's IF prices actually dropped 18.4 cents per gallon. However, there's every indication that they wouldn't. Here's why: According to the basic principles of supply and demand, cutting the price of an item causes people to buy more of it."

"For all the legislative prowess of McCain and Clinton, we’re doubtful that either candidate can rewrite the laws of supply and demand. That 18.4 cents per gallon won't go to consumers. Instead, the proposal will simply shift that money from government coffers to the oil companies. We're willing to grant that if the laws of economics themselves took a holiday and the price did drop that much, the amount saved might be meaningful to many motorists, particularly those who are low-income and those who drive a lot. And there would likely be all kinds of ancillary benefits involving price reductions for food and other products that have to be transported, as well as airline tickets and the like.

But we can't find any economists who think we'll actually see that drop in the price of gasoline. Others have tried and failed as well. And the Clinton campaign hasn't produced one, either."

"Another economist, Jeffrey Perloff, of UC-Berkeley, agreed that a federal tax moratorium would likely have less impact on consumer gas prices than a state moratorium. He said his models showed that a suspension of the 18.4-cent federal tax on gasoline would likely result in a temporary 9- to 12-cent reduction in the cost of a gallon of gas to the consumer, with the remainder of the reduction coming in wholesale prices."

"The Obama campaign says that's a key reason why he opposes McCain's plan: there is no mechanism to make sure that consumers, rather than oil companies, reap the benefits of the tax holiday.

So on this point — how Obama voted in 2000 — the RNC glosses over an important detail. Yes, he voted for the tax holiday the first time, but he opposed an extension of it because he said consumers weren't getting the benefit."

Yo everyone,

                   Guess what today is no gas day or yesterday I should say.  So how many of you knew that and how many of you actually didn't buy gas?  Just wondering if anybody in the world beside myself and my mom and my girlfriend and her parents didn't buy gas today go ahead and reply to this but for somne odd reason I have a feeling like a lot of my other blogs and such no one is going to reply.  but maybe in light of recent events so one will respond due to the fact it's about gas.  Here's hoping!!!

Well, things aren't going very well down here, maybe not for me, but for over 8,000 people in my area. We've been having MAJOR storms down here reccently, and with all the rain and flooding, a gas main broke down by the river. While there's no major ENVIROMENTAL damage, the damage to people is much greater. Over eight thousand people are without heat or power. Not only that, but it could be over a week before the thing is repaired. Schools are cancelled, busnesses are shut down because the depend on the gas for power, and that's not even the end of the problems. With the storms came wind damage. So many homes are damaged and power lines are down, so it's not only people with gas power that are without power, but electricity too. Things aren't quite a state of emergency yet, but they might be close. So. Yep. That's how things are. Wish us luck, folks.